SK Hynix said it will launch a share repurchase program worth 40 trillion South Korean won to reassure investors worried about the sustainability of rising artificial intelligence (AI) expenditures, Bloomberg reported.
According to the company's exchange filing on Wednesday, SK Hynix will buy back up to 24 million of its own shares between August 20 and November 19, and the repurchased shares will subsequently be retired. Following the announcement, the stock fell 9.8% during regular trading, though losses moderated in after-hours trading.
The company's share price has plunged more than 50% in the recent market sell-off, in part driven by fears that AI-hardware spending could slow. The buyback plan was announced just one month after SK Hynix raised $26.5 billion through a U.S. listing, underscoring how much capital flowed into the semiconductor sector amid the global AI boom.
Known as a key supplier to Nvidia, SK Hynix nevertheless could not insulate itself from the recent sector-wide declines. Josh Gilbert, an analyst at eToro, said the size of the buyback is a clear signal from the company: it shows management is putting growing cash balances to work to boost shareholder returns, which is precisely what investors expected.
The stock buyback and the company's recent capital-raising activity are important indicators for how memory-chip manufacturers may fare as AI-related spending fluctuates globally.
Note: An AI assistant participated in preparing this article; the final content was edited and verified by our journalist. This article does not constitute investment advice.
Tags: stock market, artificial intelligence, share repurchase, South Korea, Nvidia, SK Hynix, IPO, eToro, semiconductor industry
